A sudden plunge in Tesla's stock price sent shockwaves through the financial market!

As trends shifted on the evening of January 2nd, 2024, the major American stock indices experienced a rollercoaster rideBy 11:30 PM Beijing time, the Dow Jones had rose by 0.19%, the Nasdaq by 0.32%, and the S&P 500 by 0.29%. Tech stocks such as Meta surged by over 2%, with Nvidia and Amazon each climbing more than 1%.

However, Tesla found itself in tumultuous waters as its stock price plummeted, seeing a decline of over 7% at one point during the trading session

Analysts attributed this significant downturn to sales figures that fell short of market expectationsThe company disclosed that it managed to deliver 1.79 million vehicles for the full year of 2024, slightly below the analyst predictions of 1.80 million—a disappointing result that marked the first annual year-on-year decline since 2015.

Wall Street sentiments also began to diverge regarding the outlook for 2025. Notably, Jim Paulsen, the Chief Investment Strategist at Leuthold Group, known for his previously bullish assessments, expressed a sudden pivot in his viewIn a recent interview, he indicated that the U.Sstock market might undergo an adjustment in the first half of 2025, predicting a potential downturn of about 10% to 15%.

Tesla's stock falls over 7%

As the market continued to adjust that evening, the indices displayed a mixed bag

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By 11:30 PM, they had slightly stabilized with the Dow Jones up by 0.19%, Nasdaq by 0.32%, and the S&P 500 by 0.29%.

On the economic front, data from the U.SDepartment of Labor revealed that the number of first-time unemployment claims for the week ending December 28, 2024, was 211,000, lower than the expected 221,000 and down from the previous week’s 219,000. Continuing claims for unemployment benefits also dropped to a three-month low of 1.84 million.

Analysts noted that the decrease in first-time unemployment claims to an eight-month low reflects a stable labor market, demonstrating limited layoff activities amidst an otherwise resilient economic backdrop.

In the spotlight, Tesla’s stock continued to suffer

At one point, it dropped over 7%, but as the market closed, it was still down by more than 6%, which marked a potential five-day losing streakAnalysts attributed the decline to disappointing sales figures freshly disclosed by the company.

On January 2, 2024, Tesla reported its vehicle delivery numbers for the year and fourth quarterWith total vehicles delivered standing at 1.79 million, it was a step back from 1.80 million in 2023. This represented the first year-on-year drop in sales numbers for the company in nearly a decade.

In the fourth quarter alone, Tesla recorded deliveries of 495,570 vehicles—a quarterly record—but still fell short of expectations of 512,277 units

Specifically, the combined deliveries of the Model 3 and Model Y amounted to 471,930, despite the anticipated figures reaching 484,575.

Furthermore, in terms of production, the fourth quarter output stood at 459,445 vehicles, again below analyst expectations of 505,239. For the Model 3 and Y alone, production data revealed 436,718 units, against the forecast of 481,306 units.

In a related development, Apple’s stock saw a dip of over 2% during trading sessions as it announced a New Year promotional event taking place from January 4 to 7, offering significant discounts on select products for eligible payment methods.

Meanwhile, other tech stocks experienced growth—with Meta up over 2%, Nvidia and Amazon rising over 1%, and Microsoft and Google making minor gains

Semiconductor stocks also rallied, with Micron Technology and TSMC up more than 2%, and Broadcom jumping more than 1%.

As for Chinese assets, the Nasdaq Golden Dragon China Index edged down, with a 0.51% dip noted by 11:30 PMTriple leveraged long positions on the FTSE China ETF (YINN) dropped over 3%, while the China Tech Index ETF (CQQQ) fell more than 2%, and the 2x long Chinese internet stocks ETF (CWEB) slid by over 1%.

In terms of specific Chinese companies, key players like Trip.com, Zeekr, and New Oriental each faced declines of over 3%, while Bilibili also saw a drop exceeding 2%. On a more positive note, NIO and Miniso surged more than 6%, with Li Auto gaining over 2%. Additionally, stocks like Tencent Music and Pony.ai each increased by more than 1%.

Interestingly, the FTSE China A50 index futures saw a climb, marking a rise of 0.36% by 11:30 PM.

A major turning point ahead

Despite the frenzied performance of U.S

equities in 2024, Wall Street remains generally optimistic about the year aheadNevertheless, some cautious analysts argue that the prevailing optimism is misguided and does not adequately consider the possibility of an economic downturn in 2025.

Among these analysts, Jim Paulsen's recent shift in sentiments is particularly noteworthy.

In his latest interview, Paulsen stated: "I believe the U.Sstock market could face an adjustment in the first half of 2025, with a potential drop of 10% to 15%. This adjustment may take some time to manifest fully."

Analysts have pointed out that Wall Street traders appeared to panic following signals from the Federal Reserve indicating a reduction in interest rate cuts in 2025, an environment that continues to test market confidence.

For Paulsen, even with recent interest rate cuts, the restrictive nature of monetary policy is sufficient to dampen economic growth in the first half of the year

He noted that the monetary growth in the U.Sis insufficient to correspond with nominal GDP growth rates, which typically signals that actual GDP is expected to slow nearly one percentage point over the coming year.

He anticipates this scenario could reignite recession concerns in the market, potentially leading to an adjustment in U.SstocksHowever, he suggests this correction will not spell the end of the robust bull market and will likely present buying opportunities for investors.

Paulsen elucidated that the strong asset positions held by both households and corporations make it unlikely for the U.Sto slide into recession.

He advised investors to prepare for potential market turbulence by offloading some of the “winners” in U.S

equities, notably in the tech sector, and to shift focus toward defensive stocks—particularly those with high dividend yields and lower volatility within the S&P 500 index.

Additionally, Wharton School finance professor Jeremy Siegel echoed Paulsen's sentiments, suggesting that January 2025 could correspond with a pivotal inflection point for U.Sequities.

He anticipates that as investor optimism faces challenges, January may witness a reversal in the stocks of the "magnificent seven" tech giants, leading the market to "shift gears" towards a broader range of equities by 2025.

Siegel believes that over time, the main drivers promoting market gains have largely been accounted for, thereby increasing the likelihood of a correction in the U.S